Patience is a virtue

02-May-2013

The Australian real estate sector is starting to redeem itself in most marketplaces.

Along with the stability of the interest rates and strong borrowing conditions, consumer confidence in the property market is continuing to build again.

It's those investors that have hung in there to ride the "ups and downs" that will see the best results in their property investment.

Real estate investors have had to watch property values stay stagnant or fall in recent years.  Unfortunately in some marketplaces property appraisal prices have fallen below the investors original purchase price so they are understandably uneasy about staying in the game or buying an additional property.

There are also the tax benefits of owning an investment property to offset your income. Even in times of higher vacancy rates and lower rental yields the advantages of mortgage tax deductions are of high value to a lot of investors, not to mention the capital growth.

Whether you're a seasoned investor or new home buyer there are a few key points to consider when taking the plunge into investing in property:

Income of growth

Younger investors are usually focused on capital growth while older investors often rely on a rental income to supplement or fund their retirement.  This is going to depend on your choice of market place to invest in so it's important to do your research on where you are going to get the best income or capital growth.

Make a plan

It's important for anyone investing in property to have a strategy and exit plan in place for how you are going to get out.  It usually requires 10 years to make it worthwhile. Part of the planning is to have a disaster plan in place which needs to include insurance, in particular landlord and income protection.

Know the costs

It is not just your mortgage and interest rates to take into consideration when budgeting.  There are going to be council rates, insurance borrowing costs, land tax and many more. You will usually get around 30% refunded at tax time so make sure you are aware of the calculations.

It's those investors that have hung in their to ride the "ups and downs' that will see the best results in their property investment.  The key is to hang in there, buy well and have plenty of patience.